SANLAM INSTITUTIONAL BALANCED FUND

Transcription

1 SANLAM INSTITUTIONAL BALANCED FUND Supplement to the Prospectus dated 11 May 2016 for Sanlam Qualifying Investors Funds plc A QUALIFYING INVESTOR ALTERNATIVE INVESTMENT FUND An open-ended umbrella type investment company with segregated liability between Funds with registration number authorised by the Central Bank of Ireland (the "Central Bank") to which the Companies Act 2014 and chapter 2 of the AIF Rulebook applies. This Supplement contains specific information in relation to Sanlam Institutional Balanced Fund (the "Fund"), a sub-funds of Sanlam Qualifying Investors Funds plc (the "Company"). There are six other subfunds of the Company in existence namely Sanlam European Growth Basket Fund, Sanlam Institutional Bond Fund, Sanlam Institutional Equity Flexible Fund, Sanlam Africa Equity Fund, Sanlam Centre Multi- Asset Real Return Feeder Fund and Sanlam Global Fund of Hedge Funds. This Supplement forms part of and should be read in conjunction with the Prospectus for the Company dated 11 May 2016 (the "Prospectus") and the latest audited financial statements of the Company. The Directors of the Company, whose names appear in the Directors of the Company section of the Prospectus, accept responsibility for the information contained in the Prospectus and this Supplement. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case) such information is in accordance with the facts and does not omit anything likely to affect the import of such information. The Directors accept responsibility accordingly. Words and expressions defined in the Prospectus shall, unless the context otherwise requires, have the same meaning when used in this Supplement. Date: 11 May 2016

2 DIRECTORY Investment Objective and Policies... 3 Investment Restrictions... 4 Efficient Portfolio Management... 4 Investment Allocation Manager... 5 Investment Manager... 5 Listing... 5 Borrowing and Leverage... 5 Risk Factors... 6 Dividend Policy Key Information for Buying and Selling Fees and Expenses Material Contracts CBD/ / v19 2

3 Investment Objective and Policies Investment Objective The investment objective of the Fund is to provide long-term capital growth. There is no guarantee that the Fund will meet its investment objective. Investment Policies The Investment Manager intends to achieve the Fund's investment objective by investing globally across all financial markets in a diverse range of instruments which give exposure to the strategies described below, as well as derivatives including but not limited to rights or interests in securities such as options, futures, forwards, swaps, debt instruments and other forms of derivatives. The Fund intends to invest in, but not limit itself to investment in the following instruments and strategies: Long-short equities; market-neutral equities; long-only equities; the equity investments in which the Fund may invest may be listed or unlisted and may or may not be traded under the rules of a recognised or designated investment exchange. Fixed income; investment by the Fund in securities that provide a return in the form of fixed periodic payments and the eventual return of principal at maturity. Property; the Fund may make indirect investment in property through investment in property related assets, including but not limited to Real Estate Investment Trusts, mortgage backed securities and asset backed securities. Credit; involving the identification of relative value opportunities by the Investment Manager between corporate securities of companies in similar industries or sectors and seeking to capture either the divergence or convergence of credit spreads. Arbitrage; where the Fund makes a simultaneous purchase and sale of an asset in order to profit from a difference in the price. It is a trade that profits by exploiting price differences of identical or similar financial instruments, on different markets or in different forms. Global macro; where the Fund invests globally with a particular focus on the overall economic and political views of various countries. CTA; an alternative investment strategy in which the Investment Manager will use futures contracts as part of its overall investment strategy. Managed futures provide portfolio diversification among various types of investment styles and asset classes to help mitigate portfolio risk in a way that is not possible in direct equity investments. Distressed debt; involves the purchase of securities by the Fund, often debt instruments, issued by companies that are or are perceived as likely to be in distress and therefore trade at a significant discount to their redemption or perceived fair value. High yield securities; investment by the Fund in high paying securities with no credit ratings or lower than investment-grade credit ratings, because of the higher risk of default, these securities pay a higher yield than investment grade securities. Event driven; involving the trading of the securities of a company involved in a significant anticipated corporate event or special situation. Examples include spin-offs, divestitures, re-organisations, liquidations, restructurings, and share buybacks. CBD/ / v19 3

4 Multi-strategy; where the Fund invests in a combination of any of the above mentioned instruments and strategies. The Fund may also gain exposure to a specific market or market segments without holding the underlying instruments directly by investing in units of collective investment schemes ("CIS") both regulated and unregulated, long only and hedged subject to the investment restrictions below and set out in the Prospectus. Regulated Funds Regulated Funds are comprised of the following types of collective investment schemes: Undertakings for Collective Investment in Transferable Securities ("UCITS") authorised in any member state of the European Economic Area pursuant to domestic legislation implementing the UCITS directive, retail openended non-ucits investment funds authorised by the Central Bank, Guernsey Class A Schemes, Jersey Recognised Funds and Isle of Man Authorised Schemes; and Open-ended investment funds authorised in any Member State, Guernsey Class B Schemes, Jersey Funds which are not recognised, Isle of Man unauthorised schemes, US schemes which are authorised by the Securities and Exchanges Commission under the Investment Company Act, 1940 provided in all cases that such funds/schemes comply in all material respects with the Central Bank Notices in respect of retail schemes. Unregulated Funds Unregulated Funds are comprised of the following types of collective investment schemes: collective investment schemes that are not Regulated Funds and that may not provide a level of investor protection equivalent to schemes authorised under Irish laws and subject to Irish regulations and conditions. The Fund may also invest up to 100% of its Net Asset Value in exchange-traded funds (whether indexlinked ETFs or ETFs which offer exposure to hedge funds or hedge fund indices). Investment Restrictions 1. The Fund may not be geared or leveraged through investment in any security. 2. Over the counter derivative instruments (except forward currency transactions, currency (exchange rates) swaps and interest rate swap transactions) are not permitted. 3. Up to 90% of the market value of equity securities must be listed on exchanges having obtained full membership of the World Federation of Stock Exchanges. 4. At least 90% of the debt securities will have a minimum credit rate of BBB- or Baa3 (as rated by Standard & Poor's, Moody's or Fitch). 5. At least 90% of the money market instruments will have a minimum credit rating of A2, P2 or F2 (as rated by Standard & Poor's, Moody's or Fitch). In addition, the general investment restrictions contained in the "Investment Restrictions" section of the Prospectus shall apply. Efficient Portfolio Management Subject to the Investment Restrictions above, the Fund may use the following instruments for the purposes of efficient portfolio management: spot and forward currency contracts, options on securities, indices and currencies, swaps (except credit default swaps), futures and options on futures and whenissued and forward commitment securities and may enter into securities lending arrangements. Currency hedging may be undertaken to reduce the Fund s exposure to the fluctuations of the currencies CBD/ / v19 4

5 in which the Fund s assets may be denominated against the Base Currency of the Fund. The Fund may employ techniques and instruments for protection against exchange risks (including foreign exchange transactions which alter the currency characteristics of transferable securities held by the Fund) and to alter the currency exposure characteristics of transferable securities in accordance with the conditions and limits set down by the Central Bank. This section should be read in conjunction with the section entitled "Utilisation of Financial Derivative Instruments and Efficient Portfolio Management" in the Prospectus. Investment Allocation Manager The AIFM has appointed Sanlam FOUR Investments UK Limited to act as Investment Allocation Manager of the Fund. Sanlam FOUR Investments UK Limited is a company incorporated under the laws of the United Kingdom and having its registered office at 1 Ely Place, London, EC1N 6RY, United Kingdom. Sanlam FOUR Investments UK Limited provides investment management and advisory services to collective investment schemes and is regulated by the Financial Conduct Authority. Investment Manager The AIFM has appointed Sanlam Investment Management (Pty) Limited to act as Investment Manager of the Fund. Sanlam Investment Management (Pty) Limited is a company incorporated in South Africa and having its registered office and place of business at 55 Willie van Schoor Avenue, Bellville 7530, South Africa. It provides, inter alia, discretionary portfolio management services and investment advisory services for private as well as for institutional clients in all areas of international securities business. Sanlam Investment Management (Pty) Limited is regulated by the Financial Services Board in South Africa and is a wholly owned subsidiary of Sanlam Limited. Listing Class A Shares and Class C Shares issued in respect of the Fund have been admitted to listing on the Official List and trading on the Main Securities Market of the Irish Stock Exchange and dealings in those Shares of the Fund on the Irish Stock Exchange commenced on 14 October Application has been made to the Irish Stock Exchange for the Class B Shares and Class D Shares issued and available for issue in respect of the Fund to be admitted to the Official List and to trading on the Main Securities Market of the Irish Stock Exchange. Neither the admission of the Shares to listing on the Official List and trading on the Main Securities Market of the Irish Stock Exchange nor the approval of this Supplement pursuant to the listing requirements of the Irish Stock Exchange shall constitute a warranty or representation by the Irish Stock Exchange as to the competence of service providers to or any other party connected with the Fund, the adequacy of information contained in this Supplement or this Prospectus or the suitability of the Fund for investment purposes. Borrowing and Leverage In accordance with the general provisions contained in the Prospectus, the Fund may borrow up to 10% of its net assets on a temporary basis for the purposes of redeeming Shares. Borrowing for any other purpose is not permitted. Leverage may be generated in order to pursue the Fund's investment objective and policy by using a variety of strategies, including but not limited to investing in the derivative instruments referred to in the Investment Policies section above. The AIFM shall measure the amount of exposure generated from leverage activities using both the gross notional and commitment methods. Such exposure will not exceed 100% of the Fund s Net Asset Value when calculated using the commitment basis and 250% of the Fund s CBD/ / v19 5

6 Net Asset Value when calculated using the gross notional basis. Any change to these maximum levels of leverage must be disclosed to Shareholders as required under AIFMD. Borrowing or leverage presents the potential for a higher rate of total return but also increases the volatility of a Fund, including the risk of a total loss of the amount invested. Leverage may cause increased volatility by magnifying gains or losses. Risk Factors The general risk factors set out under the "Risk Factors" section in the Prospectus apply to the Fund. In addition, the following risk factors apply to the Fund. Risks of investing in unregulated funds The Fund may invest in unregulated funds. The unregulated funds in which the Fund may invest may be established in jurisdictions which do not have an equivalent level of investor protection as that provided in Ireland by CIS authorised under Irish laws and subject to Irish regulations and conditions. There may be delays in obtaining values for underlying investments, which may result in reliance on estimates in calculating the Net Asset Value of the Fund. Costs of investing in Investment Funds As an investor in other CIS, some of which may invest in other CIS (funds of funds and feeder funds), there may be a lack of transparency regarding the underlying investments of the Fund. The Fund will bear, along with other investors, its portion of the expenses of the underlying CIS (and (a) in the case of underlying CIS accessed by a fund through a feeder scheme, a portion of the expenses of such feeder schemes and (b) in the case of underlying CIS which are funds of funds, the CIS in which the funds of funds invest), including management, administration, custody and/or other fees. These fees will be in addition to the management, administration and custody fees and other expenses which the Fund bears directly in connection with its own operations. Valuation of Investment Funds The Fund may invest in CIS and will determine its Net Asset Value primarily on the basis of the value of its interests, in such CIS, as reported or provided by such CIS or their respective agents. Neither the Fund, nor the Investment Manager have any control over the valuation methods and accounting rules adopted by the CIS in which the Fund may invest and no assurance can be given that such methods and rules will at all times allow the Fund to correctly assess the value of its assets and investments. The calculation of the Net Asset Value of the Fund may be based upon an estimate of the net assets of one or more CIS which net asset value was calculated prior to the relevant Valuation Point of the Fund. As a result, the estimated net asset value and historic net asset value of the CIS may not reflect the actual net asset value of such CIS as at the relevant Valuation Point of the Fund. The AIFM will however verify whether in their reasonable opinion such estimated valuations reflect the fair value of such CIS. Speculative Nature of Investments The Fund intends to engage in the speculative trading of a wide range of debt and equity securities, options, warrants, currencies, futures, and forward contracts and derivative instruments. Liquidity Risk Certain securities may be difficult or impossible to sell at the time and the price that the seller would like. The seller may have to lower the price to effect a secondary market sale, sell other securities instead or forego an investment opportunity, any of which could have a negative effect on the Fund's management or CBD/ / v19 6

7 performance. Credit Risk Monies subscribed in advance of a Dealing Day, which are held or invested in advance of the relevant Dealing Day may be viewed by the courts as being assets of the Fund. In the event of the Fund becoming insolvent prior to the relevant Dealing Day, such monies would be at risk with all other assets of the Fund. Reliance on the Investment Manager and its Key Personnel The success of the Fund will depend widely on the experience, relationships and expertise of its key persons, who have considerable experience in the investments contemplated by the Fund. The performance of the Fund may be negatively affected if one of these individuals ceases to be involved in the management or the investment process of the Fund. There can be no assurance that these individuals will remain in their current employment or otherwise continue to be able to carry on their current duties throughout the term of the Fund. The loss of the services of any such individuals could have a material adverse effect on the operations of the Fund. In addition, such individuals might get involved in other business, including in similar projects or investment structures, and as a result thereof, would not be able to devote their entire working time to the Fund. Finally, it must be noted that the involvement in such similar projects or investment structures may create potential conflicts of interests. Hedging Although the Fund is expected to use hedging and arbitrage strategies which are intended to protect its assets from losses due to general declines in international stock markets, there can be no assurances that the hedging and arbitrage strategies that will be used will be successful. The market values of related securities or other instruments may not move in correlation with each other in ways anticipated by the Investment Manager and intervening events may cause hedged positions not to perform as anticipated. A hedged position also may perform less favourably in generally rising markets than an unhedged position. Market Risks The profitability of the investment programmes of the Fund depends to a great extent upon correctly assessing the future price movements of global capital markets, currencies and other investments. There can be no assurance that the Investment Manager will be able to predict accurately these price movements. The securities markets have in recent years been characterised by great volatility and unpredictability. With respect to the investment strategy utilised by the Investment Manager, there is always some, and occasionally a significant, degree of market risk. Emerging Markets Investing in emerging markets involves additional risks and special considerations not typically associated with investing in other more established economies or markets. Such risks may include (i) increased risk of nationalisation or expropriation of assets or confiscatory taxation; (ii) greater social, economic and political uncertainty including war; (iii) higher dependence on exports and the corresponding importance of international trade; (iv) greater volatility, less liquidity and smaller capitalisation of securities markets; (v) greater volatility in currency exchange rates; (vi) greater risk of inflation; (vii) greater controls on foreign investment and limitations on repatriation of invested capital and on the ability to exchange local currencies for US$; (viii) increased likelihood of governmental involvement in and control over the economies; (ix) governmental decisions to cease support of economic reform programs or to impose centrally planned economies; (x) differences in auditing and financial reporting standards which may result in the unavailability of material information about issuers; (xi) less extensive regulation of the financial markets; (xii) longer settlement periods for transactions and less reliable clearance and custody arrangements; (xiii) less developed corporate laws regarding fiduciary duties of officers and directors and the protection of investors; and (xiv) certain considerations regarding the maintenance of the Fund's securities and cash with foreign brokers and securities depositories. Currency Risks CBD/ / v19 7

8 The investments of the Fund which are denominated in a currency other than the Base Currency are subject to the risk that the value of a particular currency will change in relation to one or more other currencies. As a result, the Fund could realise a net loss on an investment, even if there were a gain on that investment because currency losses were taken into account. Among the factors that may affect currency values are inter alia trade balances, the level of short-term interest rates, differences in relative values of similar assets in different currencies, long-term opportunities for investment and capital appreciation and political developments. The Investment Manager may try to hedge these risks by investing in currencies, currency futures contracts and options thereon, forward currency exchange contracts, or any combination thereof, but there can be no assurance that such strategies will be implemented, or if implemented, will be effective. Derivative Transactions The Fund may use derivatives which may expose these funds to higher degrees of risk. In particular, derivative contracts can be highly volatile, and the amount of initial margin is generally small relative to the size of the contract so that transactions are geared. A relatively small market movement may have a potentially larger impact on derivatives than on standard bonds or equities. Particular Risks of Over-the-Counter ("OTC") derivative transactions In general there is less governmental regulation and supervision of transactions in the OTC markets than organised stock exchanges. Many of the protections afforded to transactions on organised exchanges such as the performance guarantee of an exchange clearing house may not exist for OTC transactions. The risk of counterparty default therefore exists. To mitigate this risk the Underlying Funds will only use preferred counterparties which it believes to be creditworthy and may reduce the exposure incurred in connection with such transactions through the use of letter of credit or collateral. However there can be no guarantee that a counterparty will not default or that the Fund will not sustain losses as a result. The AIFM or its delegates will continuously assess the credit or counterparty risk as well as the potential risk, which is for trading activities, the risk resulting from adverse movements in the level of volatility of market prices and will assess the hedging effectiveness on an ongoing basis. They will define specific internal limits applicable to these kinds of operations and monitor the counterparties accepted for these transactions. In addition to the above, the OTC market may be illiquid and it may not always be possible to execute a transaction quickly at an attractive price. From time to time the counterparties might cease making markets or quoting prices in certain of the instruments. In such instances the Fund might be unable to enter into a desired transaction in currencies, credit default swaps or total return swaps or enter into an offsetting transaction with respect to an open position which might adversely affect its performance. Further in contrast to exchange traded instruments, forward, spot and option contracts on currencies do not provide the manager or its delegate with the possibility to offset obligations through an equal and opposite transaction. For this reason entering into forward, spot or options contracts, the Fund may be required, and must be able to, perform its obligations under the contracts. Futures Contracts Trading in futures may involve substantial risks. Futures markets are highly volatile. The low margin or premiums normally required in such trading may provide a large amount of leverage, and a relatively small change in the price of a security or contract can produce a disproportionately larger profit or loss. There is no assurance that a liquid secondary market will exist for futures contracts or options purchased or sold, and the Fund may be required to maintain a position until exercise or expiration, which could result in losses. Many futures exchanges limit the amount of fluctuation permitted in contract prices during a single trading day. Once the daily limit has been reached in a particular contract, no trades may be made that day at a price beyond that limit. Contract prices could move to the daily limit for several consecutive trading days permitting little or no trading, thereby preventing prompt liquidation of futures and options positions and potentially subjecting the Fund to substantial losses. Investing in futures contracts, options or commodities is a highly specialised investment activity entailing greater than ordinary investment risk. CBD/ / v19 8

9 Options An option is the right (but not the obligation) to buy or sell a particular asset at a stated price at some date in the future within a particular period. The Fund may enter into option transactions as either the buyer or seller of this right. Options may be used for either hedging or cross hedging purposes, or for investment purposes to seek to increase total return or income. The writing and purchase of options is a specialised activity which involves specialist investment risks. If the manager or its delegate is incorrect in its expectation of changes in the market prices or determination of the correlation between the instruments or indices on which the options are written or purchased and the instruments in a fund s investment portfolio, the fund may incur losses that it would not otherwise incur. Credit Default Swaps, Interest rate, Currency, Total Return Swaps and Swaptions The use of credit default swap, interest rate, currency, total return swaps, and interest rate swaptions is a specialised activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. If the AIFM or its delegate is incorrect in its forecasts of market values, interest rates and currency exchange rates, the investment performance of the fund would be less favourable than it would have been if these investment techniques were not used. Commodity Trading Risks Trading in commodity and financial futures contracts and options thereon are highly specialised activities, which, while they may increase the total return on the investments of the Fund, may entail greater than ordinary investment risks. Counterparty and Settlement Risk To the extent the Fund invests in swaps, options, futures or other synthetic instruments, repurchase agreements or other over-the-counter transactions or, in certain circumstances, some securities, the Fund may take a credit risk with regard to parties with whom it trades and may also bear the risk of settlement default. These risks may differ materially from those entailed in exchange-traded transactions which are generally backed by clearing organisation guarantees, daily marking-to-market and settlement, and segregation and minimum capital requirements applicable to intermediaries. Transactions entered into directly between two counterparties generally do not benefit from such protections and expose the parties to the risk of counterparty default. Custody Risk A substantial portion of the Fund's assets may be invested in forward contracts, futures, options, swaps or similar financial instruments which are not capable of being deposited with custodians in the traditional sense. Accordingly, at any given time, the Fund's accounts may only contain a small amount of cash and/or direct investments, with the majority of the Fund's assets posted as collateral or otherwise held at the various banks, brokerage firms and other financial institutions with whom it has effected investment transactions. It is expected that all securities and other assets deposited with custodians or brokers will be clearly identified as being assets of the Fund and hence the Fund should not be exposed to any custody risk with respect to such parties. However, it may not always be possible to achieve this segregation and there may be practical or timing problems associated with enforcing the Fund's rights to its assets in the case of an insolvency of any such party. High Yield Securities The Fund may invest in high yield bonds and preferred securities which are rated in the lower rating categories by the various credit rating agencies (or in comparable non-rated securities). Securities in the lower rating categories are subject to greater risk of loss of principal and interest than higher- rated securities and are generally considered to be predominantly speculative with respect to the issuer's capacity to pay interest and repay principal. They are also generally considered to be subject to greater risk than securities with higher ratings in the case of deterioration of general economic conditions. Because investors generally perceive that there are greater risks associated with the lower-rated CBD/ / v19 9

10 securities, the yields and prices of such securities may tend to fluctuate more than those for higher-rated securities. The market for lower-rated securities is thinner and less active than that for higher-rated securities, which can adversely affect the prices at which these securities can be sold. In addition, adverse publicity and investor perceptions about lower-rated securities, whether or not based on fundamental analysis, may be a contributing factor in a decrease in the value and liquidity of such lower-rated securities. Small Cap Stocks At any given time, the Fund may have significant investments in smaller-to-medium sized companies of a less seasoned nature whose securities are traded in the over-the-counter market. These secondary securities often involve significantly greater risks than the securities of larger, better-known companies. Special Situations The Fund may invest in companies that are involved in (or are the target of) acquisition attempts or tender offers or companies involved in work-outs, liquidations, spin-offs, reorganisations, bankruptcies and similar transactions. In any investment opportunity involving any such type of business enterprise, there exists the risk that the transaction in which such business enterprise is involved either will be unsuccessful, take considerable time or will result in a distribution of cash or a new security the value of which will be less than the purchase price to the Fund of the security or other financial instrument in respect of which such distribution is received. Similarly, if an anticipated transaction does not in fact occur, the Fund may be required to sell its investment at a loss. Because there is substantial uncertainty concerning the outcome of transactions involving financially troubled companies in which the Fund may invest, there is a potential risk of loss by the Fund of its entire investment in such companies. Taxation Changes in tax legislation in any of the countries in which the Fund will have investments, or changes in tax treaties negotiated by those countries, could adversely affect the returns of the Fund. No assurance can be given on the actual level of taxation suffered by the Fund. Before determining to invest in the Fund, prospective investors should evaluate whether they accept the aforesaid risks which they will assume by buying Shares of the Fund. The foregoing list of risk factors does not purport to be a complete explanation of the risks involved in this offering. Prospective investors should read the entire Prospectus and this Supplement and fully evaluate all other information that they deem to be necessary before determining to invest in the Fund. Dividend Policy It is the Directors' current intention not to distribute the profits of the Fund derived from its investments. All such profits shall be reinvested in the Fund. Key Information for Buying and Selling Initial Issue Price Class B Shares USD $1 Class D Shares USD $1 Initial Offer Period Class A Shares and Class C Shares are currently in issue and are available for subscription at the Net Asset Value per Share of the relevant Class. CBD/ / v19 10

11 The Initial Offer Period for Class B Shares and Class D Shares is open and will close at 5.00pm on 30 June Base Currency US Dollars Business Day Any day (except Saturday or Sunday) on which the banks in Dublin are open for business and such other days as the Directors may, with the consent of the Depositary, determine and notify in advance to Shareholders. Dealing Day Any Business Day. Dealing Deadline In respect of a Dealing Day, 4.00 p.m. (Irish time) on the Business Day immediately preceding that Dealing Day. Valuation Point Close of business in the relevant market on the relevant Dealing Day. Minimum Shareholding Class A USD equivalent of 100,000 Class B USD equivalent of 150,000 Class C USD equivalent of 100,000 Class D USD equivalent of 100,000 Minimum Initial Investment Amount Class A USD equivalent of 100,000 Class B USD equivalent of 150,000 Class C USD equivalent of 100,000 Class D USD equivalent of 100,000 Minimum Additional Investment Amount None Preliminary Charge Five per cent of the Net Asset Value per Share (plus VAT, if any). The Company may waive in whole or in part the Preliminary Charge. Repurchase Charge Up to three per cent of the Net Asset Value per Share (plus VAT, if any). The Company may waive in whole or in part the Repurchase Fee. Settlement Date In the case of applications, close of business on the Business Day preceding the relevant Dealing Day (or CBD/ / v19 11

12 up to two Business Days after the relevant Dealing Day as may be permitted by the AIFM at its absolute discretion). In the case of repurchases, five Business Days after the relevant Dealing Day or, if later, two Business Days after the receipt of the relevant duly signed repurchase documentation. This section should be read in conjunction with the sections entitled "Subscription for Shares" and "Repurchase of Shares" in the Prospectus. Fees and Expenses Fees of the AIFM, the Depositary, any sub-custodian, the Administrator, the Registrar and Transfer Agent, the Investment Allocation Manager, the Investment Manager and the Distributor. The AIFM will be entitled to receive from the Company an annual fee of 0.75% of the net assets of the Class A Shares, 0.60% of the net assets of the Class B Shares, 0.85% of the net assets of the Class C Shares and 1.00% of the net assets of the Class D Shares. These fees will accrue and be calculated on each Dealing Day and be payable monthly in arrears. The AIFM will be responsible for all its own out of pocket costs and expenses. The AIFM will pay out of its fees, the fees of the Investment Allocation Manager, the fees of the Investment Manager and the fees and expenses of the Distributors. Where the Fund invests in units of a collective investment scheme, the manager of the scheme in which the investment is made must waive the preliminary/initial/redemption charge which it is entitled to charge for its own account in relation to the acquisition of units. Where a commission is received by the AIFM by virtue of an investment in the units of another collective investment scheme, this commission must be paid into the property of the Fund. The Administrator will be entitled to receive out of the assets of the Fund an annual fee which will not exceed 0.025% of the net assets of the Fund plus an annual fee of up to US$15,000 (plus VAT, if any) and its reasonable costs and expenses incurred by the Administrator in the performance of its duties as Administrator of the Fund. These fees shall accrue and be calculated on each Dealing Day and shall be payable monthly in arrears. The Registrar and Transfer Agent will be entitled to receive from the Company out of the assets of the Fund an annual fee which will not exceed US$3,000 plus $1,250 for each additional share class greater than two, together with reasonable costs and expenses incurred by the Registrar and Transfer Agent in the performance of their duties as Registrar and Transfer Agent of the Fund. These fees shall accrue and be calculated on each Dealing Day and shall be payable monthly in arrears. The Registrar and Transfer Agent shall also be entitled to be reimbursed out of the assets of the Fund all agreed transaction charges (which will be charged at normal commercial rates). The Depositary will be entitled to receive from the Company out of the assets of the Fund an annual fee (inclusive of sub-custody fees, which shall be charged at normal commercial rates) which will not exceed 0.012% of the net assets of the Fund (plus VAT, if any). The Depositary shall also be entitled to be reimbursed, at normal commercial rates, for its reasonable costs and expenses (and that of any subcustodian) incurred in the performance of its duties. These fees shall accrue and be calculated on each Dealing Day and shall be payable monthly in arrears. The maximum level of management fees that may be charged by CIS in which the Fund may invest shall not exceed 2% of the Net Asset Value of that CIS. The cost of establishing the Fund, obtaining authorisation from any authority, regulatory or other body, listing the Shares on the Irish Stock Exchange, filing fees and the preparation and printing of this Supplement, marketing costs and the fees of all professionals relating to it, which are estimated not to exceed 15,000 will be borne by the Fund and amortised over the five years following the first issue of shares in the Fund. The Company may be required to meet additional fees relating to AIFMD support services including (i) risk CBD/ / v19 12

13 and liquidity management reporting; (ii) regulatory reporting; and (iii) cross-border registration services which, in all cases, will be at normal commercial rates. This section shall read in conjunction with the section entitled Fees and Expenses in the Prospectus. Material Contracts The Investment Management and Advisory Agreement dated 1 January 2011 as amended between the AIFM and Sanlam International Investments Limited, as novated by a Deed of Novation, dated 20 July 2015, between the AIFM, Sanlam International Investments Limited and Sanlam FOUR Investments UK Limited, provides that the appointment of Sanlam FOUR Investments UK Limited will continue in force unless and until terminated by the AIFM giving not less than 30 days' written notice to Sanlam FOUR Investments UK Limited or by Sanlam FOUR Investments UK Limited giving not less than 90 days' written notice to the AIFM although in certain circumstances the Agreement may be terminated forthwith by notice in writing by either party; the Agreement contains certain indemnities in favour of the AIFM arising by reasons of the fraud, bad faith, negligence or wilful default of Sanlam FOUR Investments UK Limited in the performance or non-performance of its duties. The Investment Management and Allocation Agreement dated 18 November 2010 as amended 29 August 2014 between the AIFM and Sanlam Investment Management (Pty) Limited; the Agreement provides that the appointment of the Investment Manager will continue unless and until terminated by the AIFM on giving not less than 30 day s written notice to the Investment Manager or by the Investment Manager giving to the AIFM not less than 90 days notice in writing although in certain circumstances the Agreement may be terminated forthwith by notice in writing by either party to the other; this Agreement limits the liability of the Investment Manager to the AIFM to losses arising by reason of the fraud, bad faith, negligence or wilful default of the Investment Manager in the performance or non-performance of its duties. The Agreement also provides that the Investment Manager shall indemnify the AIFM to the extent that any claims, direct damages, direct losses or expenses are attributable to the fraud, bad faith, negligence or wilful default by the Investment Manager in the performance or non-performance of its duties. CBD/ / v19 13